The Example in the Text Notes San Francisco City Attorney

question 79

Multiple Choice

The example in the text notes San Francisco City Attorney sued ________ because the company chose to market caffeinated energy drinks to children despite alleged health risks.

• A) Monster Beverage Corp.
• B) Hansen's Natural Beverage Corp.
• C) The Coca-Cola Company
• D) Pepsico
• E) Red Bull GmbH

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Definitions:

Direct Costing

A costing method where only variable manufacturing costs are assigned to inventory and cost of goods sold, with fixed manufacturing overhead treated as a period cost.

Variable Costing

An accounting method that includes only variable production costs (direct materials, direct labor, and variable manufacturing overhead) in the cost of goods sold, with fixed overhead costs treated as period expenses.

Cost of Goods Sold

The direct costs attributable to the production of the goods sold in a company, including both materials and labor costs.

Absorption Costing Income Statement

An income statement where all manufacturing costs, both variable and fixed, are treated as product costs, with non-manufacturing costs treated as period costs.